I am particularly interested in interpersonal trust, social interactions, and more generally, the 'new' institutional economics, with a particular focus on the economics of informal institutions such as norms and conventions. Methodologically, my research draws on recent developments in the econometrics of social interactions and in the analysis of adaptive learning processes and equilibrium selection in recurrent coordination games. Another area of active research has been on Guyana’s macroeconomic adjustment programme, with a particular emphasis on public finance in an open economy.

Interpersonal Trust, Social Interactions, and the Interaction between Formal and Informal Institutions; Public Policy and Trust in Low-trust Economies

Mobilising remittances for economic development

Economic development in norm-based societies

Institutions and incentives in education.

Constitutional Design in Small, Poor, and Fragmented Economies

Here is a summary of my research on Interpersonal Trust or trust among relative strangers:

Using data from a cross-section of more than 60 countries surveyed by the World Values Survey, I have established the existence of strong endogenous effects in the trust decision, such that people tend to be more or less trusting as others in society are themselves more or less trusting. Such within-country conformity in trust decisions is also associated with a striking global diversity in average trust across countries. Methodologically, this result on trust was established in a social interactions empirical model, and explained as the outcome of adaptive learning in a game of trust with Stag Hunt payoffs. The preponderance of low trust in the world reflects the idea that in the long run, people coordinate on the stochastically stable risk-dominant Nash equilibrium of mutual cynicism. Getting out of a low trust trap would involve a norm-shifting or tipping mechanism, while sustaining high or medium trust requires good formal institutions that enhance trustworthiness. Both high and low trust equilibria are stable, but medium trust is highly unstable.

The following diagram shows the mean trust data for the cross-section of countries: